Fourth Quarter 2011 & 2012 Forecast Earnings Conference Call February 2, 2012 Exhibit 99.2 |
02/02/12 Proprietary and Confidential 2 Safe Harbor Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include, among others, a slowdown of the economic recovery and decreases in freight demand, our ability to obtain adequate profit margins for our services, our inability to maintain current pricing levels due to soft economic conditions, uncertainty or decline in economic and market conditions affecting demand for our services, a decline in the market for used vehicles resulting in a decline in residual values of our lease or rental vehicles, competition from other service providers, customer retention levels, unexpected volatility or declines in automotive or high-tech volume, loss of key customers in the Supply Chain Solutions (SCS) business segment, unexpected reserves or write-offs due to the deterioration of the credit worthiness or bankruptcy of customers, changes in financial, tax or regulatory requirements or changes in customers’ business environments that will limit their ability to commit to long-term vehicle leases, a decrease in credit ratings, increased debt costs resulting from volatile financial markets, inability to achieve planned synergies and customer retention levels or anticipate costs and liabilities from acquisitions, labor strikes or work stoppages affecting our or our customers’ business operations, driver and technician shortages and increasing driver cost adequacy of accounting estimates, reserves and accruals particularly with respect to pension, taxes, insurance and revenue, a decline in pension plan returns, changes in obligations relating to multi-employer plans, sudden or unusual changes in fuel prices, our ability to manage our cost structure, new accounting pronouncements, rules or interpretations, changes in government regulations, new proposed changes in lease accounting rules, the inability to comply with government regulations particularly relating to various state and federal privacy, employment and environmental regulations, new legal proceedings or unanticipated outcomes in existing legal proceedings and the risks described in our filings with the Securities and Exchange Commission. The risks included here are not exhaustive. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. |
Contents Fourth Quarter 2011 Results Overview Asset Management Update 2012 Forecast Q & A 02/02/12 3 Proprietary and Confidential |
02/02/12 Proprietary and Confidential 4 4th Quarter Results Overview Earnings per diluted share from continuing operations were $0.92 in 4Q11 vs. $0.80 in 4Q10 – 4Q11 included a $0.05 charge for acquisition-related restructuring costs – 4Q10 included a $0.15 net benefit related to income taxes, partially offset by restructuring and other items Comparable earnings per share from continuing operations were $0.97 vs. $0.65 in 4Q10 Total revenue increased 17% (and operating revenue increased 16%) vs. prior year reflecting the impact of acquisitions and organic revenue growth |
Proprietary and Confidential 5 Key Financial Statistics Fourth Quarter ($ Millions, Except Per Share Amounts) Note: Amounts throughout presentation may not be additive due to rounding. (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Includes discontinued operations and restructuring charges and other items. 02/02/12 2011 2010 % B/(W) Operating Revenue (1) 1,237.0 $ 1,061.9 $ 16% Fuel Services and Subcontracted Transportation Revenue 304.0 251.5 21% Total Revenue 1,541.1 $ 1,313.4 $ 17% Earnings Per Share From Continuing Operations 0.92 $ 0.80 $ 15% Comparable Earnings Per Share From Continuing Operations (1) 0.97 $ 0.65 $ 49% Earnings Per Share (2) 0.93 $ 0.72 $ 29% Memo: Average Shares (Millions) - Diluted 50.7 51.0 Tax Rate From Continuing Operations 34.8% 16.4% Comparable Tax Rate From Continuing Operations (1) 34.4% 35.9% |
02/02/12 Proprietary and Confidential 6 Key Financial Statistics Full Year ($ Millions, Except Per Share Amounts) (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Includes discontinued operations and restructuring charges and other items. 2011 2010 % B/(W) Operating Revenue (1) 4,814.6 $ 4,158.2 $ 16% Fuel Services and Subcontracted Transportation Revenue 1,236.0 978.1 26% Total Revenue 6,050.5 $ 5,136.4 $ 18% Earnings Per Share From Continuing Operations 3.31 $ 2.37 $ 40% 3.49 $ 2.22 $ 57% Earnings Per Share 3.28 $ 2.25 $ 46% Memo: 50.9 51.9 Tax Rate From Continuing Operations 38.7% 33.1% 36.7% 38.3% 5.7% 4.8% Comparable Tax Rate From Continuing Operations (1) Adjusted Return on Capital (Trailing 12 month) (1) Average Shares (Millions) - Diluted Comparable Earnings Per Share From Continuing Operations (1) (2) |
02/02/12 Proprietary and Confidential 7 4th Quarter Results Overview - FMS Fleet Management Solutions (FMS) total revenue up 13% (and operating revenue up 12%) vs. prior year – Contractual revenue up 4% – Full service lease revenue up 5% – Contract maintenance revenue decreased 1% – Commercial rental revenue up 38% – Fuel revenue up 18% due primarily to increase in fuel pass-throughs FMS earnings before tax (EBT) up 41% – FMS EBT percent of operating revenue up 180 basis points to 8.6% FMS earnings positively impacted by better commercial rental performance, acquisitions and improved used vehicle sales results – These benefits were partially offset by higher maintenance costs on an older fleet, investments in sales and marketing, and higher compensation-related expenses |
02/02/12 Proprietary and Confidential 8 4th Quarter Results Overview – SCS / DCC Supply Chain Solutions (SCS) total revenue up 26% (and operating revenue up 26%) vs. prior year due to the TLC acquisition and new business SCS earnings before tax (EBT) up 44% – SCS EBT percent of operating revenue up 70 basis points to 5.5% SCS earnings increased due to the TLC acquisition, favorable insurance development and new business Dedicated Contract Carriage (DCC) total revenue up 29% (and operating revenue up 23%) due to the Scully acquisition and higher fuel pass-throughs DCC earnings before tax (EBT) up 7% – DCC EBT percent of operating revenue down 70 basis points to 4.8% DCC earnings increased due to favorable insurance development, partially offset by lower operating performance |
02/02/12 Proprietary and Confidential 9 Business Segments Fourth Quarter ($ Millions) (1) (1) (2) 2011 2010 % B/(W) 2011 2010 % B/(W) Operating Revenue: (1) Fleet Management Solutions 813.3 $ 726.3 $ 12% 1,074.7 $ 948.1 $ 13% Supply Chain Solutions 324.7 258.3 26% 408.7 325.1 26% Dedicated Contract Carriage 147.1 119.3 23% 156.6 121.8 29% Eliminations (48.1) (41.9) (15)% (98.9) (81.6) (21)% Total 1,237.0 $ 1,061.9 $ 16% 1,541.1 $ 1,313.4 $ 17% Segment Earnings Before Tax: Fleet Management Solutions 69.9 $ 49.5 $ 41% Supply Chain Solutions 17.8 12.3 44% Dedicated Contract Carriage 7.0 6.5 7% Eliminations (7.1) (4.8) (49)% 87.6 63.6 38% Central Support Services (Unallocated Share) (11.1) (10.8) (3)% 76.4 52.8 45% (3.3) (3.2) NM Earnings Before Income Taxes 73.1 49.6 47% Provision for Income Taxes (25.4) (8.1) (212)% Earnings from Continuing Operations 47.7 $ 41.5 $ 15% 50.1 $ 33.8 $ 48% Net Earnings 48.1 $ 37.1 $ 30% Memo: Total Revenue Earnings Before Restructuring and Income Taxes Restructuring and Other Charges, Net and Other Items Comparable Earnings from Continuing Operations (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures (2) Our primary measure of segment financial performance excludes restructuring and other charges, net and other items. The applicable portion of the restructuring and other items that related to each segment was as follows: FMS – ($3.3) in 2011, and SCS – ($3.2) in 2010. |
02/02/12 Proprietary and Confidential 10 Business Segments Full Year ($ Millions) 2011 2010 % B/(W) 2011 2010 % B/(W) Operating Revenue: (1) Fleet Management Solutions 3,135.9 $ 2,846.5 $ 10% 4,218.3 $ 3,712.2 $ 14% Supply Chain Solutions 1,290.9 1,005.0 28% 1,605.4 1,252.3 28% Dedicated Contract Carriage 566.6 468.5 21% 600.7 482.6 24% Eliminations (178.8) (161.8) (11)% (373.8) (310.6) (20)% Total 4,814.6 $ 4,158.2 $ 16% 6,050.5 $ 5,136.4 $ 18% Segment Earnings Before Tax : Fleet Management Solutions 250.1 $ 172.2 $ 45% Supply Chain Solutions 69.5 47.1 47% Dedicated Contract Carriage 32.5 31.0 5% Eliminations (24.2) (19.3) (26)% 327.9 231.0 42% Central Support Services (Unallocated Share) (42.7) (41.5) (3)% Earnings Before Restructuring and Income Taxes (1) 285.2 189.5 51% Restructuring and Other Charges, Net and Other Items (2) (5.8) (3.2) NM Earnings Before Income Taxes 279.4 186.3 50% Provision for Income Taxes (108.0) (61.7) (75)% Earnings from Continuing Operations 171.4 $ 124.6 $ 38% Comparable Earnings from Continuing Operations (1) 180.6 $ 117.0 $ 54% Net Earnings 169.8 $ 118.2 $ 44% Memo: Total Revenue (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Our primary measure of segment financial performance excludes restructuring and other charges, net and other items. The applicable portion of the restructuring and other items that related to each segment was as follows: FMS – ($5.7) and DCC – ($0.01) in 2011, and SCS – ($3.2) in 2010. |
02/02/12 Proprietary and Confidential 11 Capital Expenditures 2011 $ 2011 2010 O/(U) 2010 Full Service Lease 1,067 $ 647 $ 420 $ Commercial Rental 622 379 244 Operating Property and Equipment 71 62 8 Gross Capital Expenditures 1,760 1,088 672 Less: Proceeds from Sales (Primarily Revenue Earning Equipment) 300 235 66 Less: Sale and Leaseback of Revenue Earning Equipment 37 - 37 Net Capital Expenditures 1,422 $ 853 $ 569 $ Memo: Acquisitions 362 $ 212 $ 150 $ Full Year ($ Millions) |
02/02/12 Proprietary and Confidential 12 Cash Flow from Continuing Operations Full Year ($ Millions) 2011 2010 Earnings from Continuing Operations 171 $ 125 $ Depreciation 872 834 Gains on Vehicle Sales, Net (63) �� (29) Amortization and Other Non-Cash Charges, Net 57 57 Pension Contributions (65) (64) Changes in Working Capital and Deferred Taxes 69 105 Cash Provided by Operating Activities 1,042 1,028 Proceeds from Sales (Primarily Revenue Earning Equipment) 300 235 Proceeds from Sale and Leaseback of Assets 37 - Collections of Direct Finance Leases 62 62 Other, Net - 3 Total Cash Generated (1) 1,442 1,328 Capital Expenditures (2) (1,699) (1,070) Free Cash Flow (1)(3) (257) $ 258 $ (1) Non-GAAP financial measure; refer to Appendix – Non-GAAP Financial Measures. (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. (3) Free Cash Flow excludes acquisitions and changes in restricted cash. |
02/02/12 Proprietary and Confidential 13 Debt to Equity Ratio Note: Includes impact of accumulated net pension related equity charge of $595 million as of 12/31/11 and $423 million as of 12/31/10. (1) The Company uses total obligations and total obligations to equity, non-GAAP financial measures; refer to Appendix – Non-GAAP Financial Measures. (2) Represents long term total obligations to equity target of 250 - 300% while maintaining a strong investment grade rating. ($ Millions) (1) (2) 12/31/11 12/31/10 Balance Sheet Debt 3,382 $ 2,747 $ Percent To Equity 257% 196% Total Obligations (1) 3,446 $ 2,847 $ Percent To Equity (1) 261% 203% Total Equity 1,318 $ 1,404 $ 2010 Equity 1,404 $ Earnings 170 Net Pension Charge (173) Dividends & Other (83) 2011 Equity 1,318 $ Change to Total Equity 275% 234% 201% 146% 129% 151% 168% 157% 225% 183% 203% 261% 275% 0% 50% 100% 150% 200% 250% 300% 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 Long Term Target Midpoint Total Obligations to Equity Balance Sheet Debt to Equity |
Contents Fourth Quarter 2011 Results Overview Asset Management Update 2012 Forecast Q & A 02/02/12 14 Proprietary and Confidential |
02/02/12 Proprietary and Confidential 15 Units held for sale were 6,300 at quarter end, up 21% from 5,200 units held for sale in the prior year – Used vehicle inventory is at the low end of our target range The number of used vehicles sold in the fourth quarter were 4,200, up 5% from the prior year Proceeds per unit were up 29% for tractors and were unchanged for trucks in the fourth quarter compared with prior year (excluding the impact of exchange rates) – Proceeds per unit were up 5% for tractors and down 3% for trucks vs. the prior quarter Vehicles no longer earning revenue were 8,900 at quarter-end, up 1,700 or 24% from the prior year Average fourth quarter total commercial rental fleet was up 31% year-over-year (13% excluding acquisitions) Global Asset Management Update (1) (1) Units rounded to nearest hundred. |
Contents Fourth Quarter 2011 Results Overview Asset Management Update 2012 Forecast Q & A 02/02/12 16 Proprietary and Confidential |
02/02/12 Proprietary and Confidential 17 2012 Forecast Assumptions General Moderate economic growth Improved new sales in all segments Higher pension costs Foreign exchange rates assume continued strengthening of the dollar Higher contractual sales and better renewal rates resulting in continued organic fleet growth throughout the year Increased rental pricing and demand, with a larger fleet Higher volume of used vehicle sales with stable pricing Partial carryover benefits from prior year’s acquisition Depreciation residual benefit due to higher historical vehicle pricing Margin benefits resulting from organic growth and productivity initiatives will be partially offset by higher maintenance costs on a slightly older lease fleet Increased investment for fleet replacement, growth and higher new vehicle costs FMS |
02/02/12 Proprietary and Confidential 18 SCS Revenue growth due to new business and higher volumes Margin improvement driven by revenue growth Operational initiatives in the dedicated service offering contribute to improved margin 2012 Forecast Assumptions |
Proprietary and Confidential 19 Key Financial Statistics (1) Non-GAAP financial measure; refer to Appendix – Non-GAAP Financial Measures. ($ Millions, Except Per Share Amounts) Note: Earnings per share amounts are calculated independently for each component and may not be additive due to rounding. 02/02/12 2011 % B / (W) Revenue: Operating (1) $ 5,100 4,815 $ 6% Fuel Services and Subcontracted Transportation 1,200 1,236 (3)% Total Revenue $ 6,300 6,051 $ 4% Earnings From Continuing Operations: Earnings Before Income Taxes $ 320 - 328 279 $ 15 - 17% Earnings $ 205 - 210 171 $ 20 - 23% Comparable Earnings Before Income Taxes (1) $ 322 - 329 285 $ 13 - 15% Comparable Earnings (1) $ 206 - 211 181 $ 14 - 17% Earnings Per Share (EPS) From Continuing Operations: EPS $ 3.98 - 4.08 3.31 $ 20 - 23% Comparable EPS (1) $ 4.00 - 4.10 3.49 $ 15 - 17% Memo: Average Shares (Millions) - Diluted 50.9 50.9 Tax Rate 35.9% 38.7% Comparable Tax Rate (1) 35.9% 36.7% Adjusted Return on Capital ( Trailing 12 Month ) (1) 5.9% 5.7% 2012 Forecast |
02/02/12 Proprietary and Confidential 20 Business Segment Revenue (1) Includes fuel revenue. (2) Includes full service lease and contract maintenance. (3) Represents combined reporting of SCS and DCC activity. (4) Includes subcontracted transportation revenue. 2012 Forecast Midpoint Change % vs. 2011 Fleet Management Solutions: Total Revenue (1) 6% Contractual Revenue (2) 5% Commercial Rental Revenue 17% Operating Revenue 8% Supply Chain Solutions: (3) Total Revenue (4) 1% Operating Revenue 2% |
$4.00 - 4.10 $3.49 $0.05 $0.09 $0.14 $0.22 $0.13 - 0.17 $0.25 - 0.29 ($0.18) ($0.11 - 0.13) ($0.06) 2011 EPS Pension Plans Strategic Investments & Other Foreign Exchange Tax Rate SCS Acquisitions (Completed in 2011) Depreciation / Residual Impact FMS Contractual Commercial Rental 2012 Forecast EPS 02/02/12 Proprietary and Confidential 21 2012 Causes of EPS Change ($ Earnings Per Share) (1) 2011 Comparable EPS is a Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (1) |
02/02/12 Proprietary and Confidential 22 Capital Expenditures, Cash Flow & Leverage Full Year ($ Millions) (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Free Cash Flow excludes acquisitions. Acquisitions totaled $362 million in 2011. 2012 Forecast 2011 Full Service Lease - Replacement $ 1,120 - 1,200 Full Service Lease - Growth 290 - 310 Full Service Lease 1,410 - 1,510 1,067 $ Commercial Rental - Replacement 450 Commercial Rental - Growth 140 Commercial Rental 590 622 Operating Property and Equipment 100 71 Gross Capital Expenditures 2,100 - 2,200 1,760 Less: Proceeds from Sales 390 300 - 37 Net Capital Expenditures 1,710 - 1,810 1,422 Cash Provided by Operating Activities 1,215 - 1,255 1,042 Total Cash Generated (1) 1,670 - 1,710 1,442 Free Cash Flow (1) (2) (400) - (460) (257) $ Total Obligations to Equity (1) 261% - 265% 261% Less: Proceeds from Sale and Leaseback |
Adjusted Return on Capital (1) History Proprietary and Confidential 23 Return on Equity 15.3% 14.6% 15.5% 14.2% 11.2% 4.4% 8.4% 11.9% 15.1% Adjusted Total Capital (1) $3,359 $3,846 $4,184 $4,789 $4,841 $4,244 $4,030 $4,588 $5,171 ROC O/(U) COC 0.8% 1.0% 1.2% 0.8% 0.8% (2.2)% (1.3)% 0.2% 0.9% 02/02/12 (1) Non-GAAP financial measure; refer to Appendix – Non-GAAP Financial Measures. Adjusted Total Capital represents Adjusted Average Total Capital in millions. 2012 Forecast Adjusted Return on Capital (ROC) (1) Cost of Capital (COC) |
02/02/12 24 EPS Forecast – Continuing Operations ($ Earnings Per Share) Proprietary and Confidential First Quarter Full Year 2012 Comparable EPS Forecast (1) $ 0.55 - 0.58 $ 4.00 - 4.10 2011 Comparable EPS (1) $0.51 $3.49 (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. 2012 Comparable EPS Forecast excludes $0.02 in restructuring charges. |
02/02/12 25 Comparable EPS – Excluding Non-Service Pension Costs ($ Earnings Per Share) Proprietary and Confidential Comparable EPS (1) $ 2.09 3.09 3.41 3.94 4.13 4.68 1.70 2.22 3.49 4.05 Non-Service Pension Costs (2) $ 0.44 0.22 0.18 0.22 (0.09) (0.25) 0.50 0.31 0.22 0.39 Comparable EPS Excluding Non-Service Pension Costs (1) (3) $ 2.53 3.31 3.59 4.16 4.04 4.43 2.20 2.53 3.71 4.44 Comparable Earnings Per Share Excluding Pension (1) (3) GAAP EPS $ 2.09 3.27 3.53 3.99 4.19 4.51 1.62 2.37 3.31 4.03 (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (2) Non-service pension costs primarily represents interest cost, expected return on plan assets and recognized net actuarial gains/losses. (3) Given the potentially significant change in pension expense from year to year and the non-operational nature of pension expense, the company uses Comparable EPS Excluding Non- Service Pension Costs, a non-GAAP financial measure, which excludes non-service pension costs and other non-operational items, to better evaluate year over year operating performance. $2.53 $3.31 $3.59 $4.16 $4.04 $4.43 $2.20 $2.53 $3.71 $4.44 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Forecast Midpoint |
Q&A 02/02/12 26 Proprietary and Confidential |
Appendix Business Segment Detail Central Support Services Balance Sheet Asset Management Return on Capital History Financial Indicators Forecast Pension Expense New Income Statement Format Non-GAAP Financial Measures & Reconciliations 02/02/12 27 Proprietary and Confidential |
02/02/12 Proprietary and Confidential 28 Fleet Management Solutions (FMS) 2011 2010 % B/(W) Full Service Lease 508.4 $ 485.0 $ 5% Contract Maintenance 38.8 39.0 (1)% Contractual Revenue 547.2 524.0 4% Contract-related Maintenance 49.1 39.6 24% Commercial Rental 200.3 145.5 38% Other 16.7 17.1 (2)% Operating Revenue 813.3 726.3 12% Fuel Services Revenue 261.3 221.8 18% Total Revenue 1,074.7 $ 948.1 $ 13% Segment Earnings Before Tax (EBT) 69.9 $ 49.5 $ 41% Segment EBT as % of Total Revenue 6.5% 5.2% Segment EBT as % of Operating Revenue 8.6% 6.8% Fourth Quarter ($ Millions) |
02/02/12 Proprietary and Confidential 29 Fleet Management Solutions (FMS) Full Year ($ Millions) 2011 2010 % B/(W) Full Service Lease 1,996.3 $ 1,934.3 $ 3% Contract Maintenance 155.2 158.8 (2)% Contractual Revenue 2,151.5 2,093.1 3% Contract-related Maintenance 192.7 160.9 20% Commercial Rental 722.6 525.1 38% Other 69.1 67.4 2% Operating Revenue 3,135.9 2,846.5 10% Fuel Services Revenue 1,082.5 865.6 25% Total Revenue 4,218.3 $ 3,712.2 $ 14% Segment Earnings Before Tax (EBT) 250.1 $ 172.2 $ 45% Segment EBT as % of Total Revenue 5.9% 4.6% Segment EBT as % of Operating Revenue 8.0% 6.0% Adjusted Return on Capital 5.8% 5.1% |
02/02/12 Proprietary and Confidential 30 Supply Chain Solutions (SCS) Fourth Quarter ($ Millions) 2011 2010 % B/(W) Automotive 123.3 $ 114.3 $ 8% High-Tech 59.4 59.3 - Retail & CPG 103.2 46.0 124% Industrial & Other 38.8 38.7 - Operating Revenue 324.7 258.3 26% Subcontracted Transportation 84.0 66.8 26% Total Revenue 408.7 $ 325.1 $ 26% Segment Earnings Before Tax (EBT) 17.8 $ 12.3 $ 44% Segment EBT as % of Total Revenue 4.3% 3.8% Segment EBT as % of Operating Revenue 5.5% 4.8% Memo: Fuel Costs 26.2 $ 21.0 $ (25)% |
02/02/12 31 Supply Chain Solutions (SCS) Full Year ($ Millions) 2011 2010 % B/(W) Automotive 469.2 $ 449.2 $ 4% High-Tech 236.1 220.5 7% Retail & CPG 420.5 177.8 137% Industrial & Other 165.0 157.5 5% Operating Revenue 1,290.9 1,005.0 28% Subcontracted Transportation 314.5 247.3 27% Total Revenue 1,605.4 $ 1,252.3 $ 28% Segment Earnings Before Tax (EBT) 69.5 $ 47.1 $ 47% Segment EBT as % of Total Revenue 4.3% 3.8% Segment EBT as % of Operating Revenue 5.4% 4.7% Adjusted Return on Capital 11.2% 16.9% Memo: Fuel Costs 96.4 $ 78.8 $ (22)% 31 Proprietary and Confidential |
02/02/12 Proprietary and Confidential 32 Dedicated Contract Carriage (DCC) Fourth Quarter ($ Millions) 2011 2010 % B/(W) Operating Revenue 147.1 $ 119.3 $ 23% Subcontracted Transportation 9.5 2.6 269% Total Revenue 156.6 $ 121.8 $ 29% Segment Earnings Before Tax (EBT) 7.0 $ 6.5 $ 7% Segment EBT as % of Total Revenue 4.5% 5.3% Segment EBT as % of Operating Revenue 4.8% 5.5% Memo: Fuel Costs 33.7 $ 22.3 $ (51)% |
02/02/12 Dedicated Contract Carriage (DCC) 2011 2010 % B/(W) Operating Revenue 566.6 $ 468.5 $ 21% Subcontracted Transportation 34.0 14.0 142% Total Revenue 600.7 $ 482.6 $ 24% Segment Earnings Before Tax Earnings (EBT) 32.5 $ 31.0 $ 5% Segment EBT as % of Total Revenue 5.4% 6.4% Segment EBT as % of Operating Revenue 5.7% 6.6% Adjusted Return on Capital 16.6% 18.2% Memo: Fuel Costs 127.3 $ 83.9 $ (52)% Full Year ($ Millions) 33 Proprietary and Confidential |
02/02/12 Proprietary and Confidential 34 Central Support Services (CSS) 2011 2010 % B/(W) Allocated CSS Costs 40.8 $ 37.2 $ (10)% Unallocated CSS Costs 11.1 10.8 (3)% Total CSS Costs 52.0 $ 48.0 $ (8)% Fourth Quarter ($ Millions) |
02/02/12 Central Support Services (CSS) 2011 2010 % B/(W) Allocated CSS Costs 161.1 $ 142.2 $ (13)% Unallocated CSS Costs 42.7 41.5 (3)% Total CSS Costs 203.8 $ 183.7 $ (11)% Full Year ($ Millions) 35 Proprietary and Confidential |
02/02/12 Proprietary and Confidential 36 Balance Sheet December 31, December 31, 2011 2010 Cash and Cash Equivalents 105 $ 213 $ Other Current Assets 984 810 Revenue Earning Equipment, Net 5,050 4,201 Operating Property and Equipment, Net 624 607 Other Assets 856 821 Total Assets 7,618 $ 6,652 $ Short-Term Debt / Current Portion Long-Term Debt 274 $ 420 $ Other Current Liabilities 900 711 Long-Term Debt 3,108 2,327 Other Non-Current Liabilities (including Deferred Income Taxes) 2,018 1,790 Shareholders' Equity 1,318 1,404 Total Liabilities and Shareholders' Equity 7,618 $ 6,652 $ ($ Millions) |
U.S. Asset Management Update (a) (a) U.S. only (b) Excludes early terminations where customer purchases vehicle (c) Current year statistics may exclude some units due to a lag in reporting (b)(c) Number of Units 3,469 4,350 3,929 4,103 4,243 4,793 3,824 5,168 4,698 4,363 7,537 6,096 4,698 9,060 3,636 4,190 7,784 3,012 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Redeployments Extensions Early Terminations FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 02/02/12 37 Proprietary and Confidential Redeployments – vehicles coming off-lease with useful life remaining are redeployed in the Ryder fleet (Commercial Rental, DCC, SCS, or with another Lease customer). – Ryder re-prices lease contract and extends maturity date. – customer elects to terminate lease prior to maturity. Depending on the remaining useful life, the vehicle may be redeployed in the Ryder fleet (Commercial Rental, DCC, SCS, other Lease customer) or sold by Ryder. Extensions Early terminations |
02/02/12 Proprietary and Confidential 38 2000 2001 2002 2003 2004 2005 2006 2007 2008 Financial Indicators Forecast (1) Gross Capital Expenditures (3) ($ Millions) Total Cash Generated (2) (3) Total Obligations to Equity Ratio (2) $1,289 $600 $725 $1,165 $657 $1,399 $1,182 2000 2001 2002 2003 2004 2005 Memo: Free Cash Flow (2) (3) $1,757 2006 2007 2008 $1,265 2009 2010 2010 2009 $611 131 367 357 289 (208) (4) 380 (242) (439) 341 614 $1,088 Total Obligations to Equity Balance Sheet Debt to Equity 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 275% 146% 129% 234% 151% 157% 168% 225% 183% 203% 201% Significant and predictable cash generation Invest in growth (organic, acquisitions) Over time appropriately move financial leverage towards long term target of 250-300% Total Obligations to Equity 263% Long Term Target Midpoint 2011 (430) 2012 Forecast Midpoint 2011 261% Forecast Midpoint 258 $1,760 Full Service Lease PP&E/Other Commercial Rental 2012 275% 2012 Forecast Midpoint $2,200 2011 (257) $1,054 $835 $949 $1,091 $1,381 $1,179 $1,252 $1,684 $1,571 $1,266 $1,328 $1,442 $1,690 (1) Obligations to Equity include acquisitions. Free Cash Flow and Gross Capital Expenditures exclude acquisitions. (2) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures. (3) 2000-2004 not restated for operations discontinued in 2009. (4) Includes $176 million payment to the IRS related to full resolution of 1998 - 2000 tax period matters. |
02/02/12 Proprietary and Confidential 39 Pension Expense ($ Millions) 2011 Pension Expense 38 Lower than Assumed Return on Assets in 2011 11 Lower Expected Return Assumption 7 Benefit of Pension Contributions (6) Lower Discount Rate 4 2012 Estimated Pension Expense 54 $ $ |
New Income Statement Format - 2011 Proprietary and Confidential 40 02/02/12 ($ Millions) 1Q 2011 2Q 2011 3Q 2011 4Q 2011 FY 2011 Lease & Rental Revenues 579.4 $ 634.7 $ 675.3 $ 664.5 $ 2,553.9 $ Services Revenue 632.7 640.5 669.9 666.0 2,609.2 Fuel Services Revenue 213.2 238.1 225.5 210.6 887.5 Total Revenues 1,425.4 1,513.3 1,570.7 1,541.1 6,050.5 Cost of Lease & Rental 408.5 429.2 461.8 446.6 1,746.1 Cost of Services 537.9 533.6 554.9 560.0 2,186.4 Cost of Fuel Services 209.0 233.5 223.3 207.7 873.5 Other Operating Expenses 34.6 30.2 30.3 34.1 129.2 Selling, General & Administrative Expenses 173.1 195.2 200.1 202.9 771.2 Gain on Vehicle Sales, net (12.3) (15.7) (18.3) (16.6) (62.9) Interest Expense 34.4 33.0 32.7 33.0 133.2 Miscellaneous Income, net (4.1) (0.6) (1.7) (2.6) (9.1) Restructuring and Other Charges, net 0.8 - - 2.9 3.7 1,381.8 1,438.3 1,483.1 1,468.0 5,771.2 Earnings Before Income Taxes 43.6 75.0 87.6 73.1 279.4 Provision for Income Taxes 17.8 34.1 30.7 25.4 108.0 Earnings from Continuing Operations 25.9 $ 40.9 $ 56.9 $ 47.7 $ 171.4 $ |
New Income Statement Format - 2010 Proprietary and Confidential 41 02/02/12 ($ Millions) 1Q 2010 2Q 2010 3Q 2010 4Q 2010 FY 2010 Lease & Rental Revenues 543.6 $ 574.4 $ 597.5 $ 594.4 $ 2,309.8 $ Services Revenue 504.3 527.3 541.2 536.9 2,109.7 Fuel Services Revenue 172.0 184.4 178.3 182.1 716.9 Total Revenues 1,219.9 1,286.1 1,316.9 1,313.4 5,136.4 Cost of Lease & Rental 387.6 396.4 414.7 405.6 1,604.3 Cost of Services 423.0 438.5 450.4 451.2 1,763.0 Cost of Fuel Services 167.6 179.4 173.8 178.3 699.1 Other Operating Expenses 39.8 32.8 30.8 30.8 134.2 Selling, General & Administrative Expenses 152.2 162.6 163.0 177.6 655.4 Gain on Vehicle Sales, net (4.5) (6.6) (6.9) (10.7) (28.7) Interest Expense 33.3 31.2 31.9 33.6 130.0 Miscellaneous Income, net (1.5) (0.3) (2.7) (2.6) (7.1) Restructuring and Other Charges, net - (0.0) 0.0 (0.0) (0.0) 1,197.4 1,233.9 1,254.9 1,263.8 4,950.1 Earnings Before Income Taxes 22.5 52.2 62.0 49.6 186.3 Provision for Income Taxes 9.6 21.6 22.3 8.1 61.7 Earnings from Continuing Operations 12.9 $ 30.6 $ 39.7 $ 41.5 $ 124.6 $ |
New Income Statement Format - 2009 Proprietary and Confidential 42 02/02/12 ($ Millions) 1Q 2009 2Q 2009 3Q 2009 4Q 2009 FY 2009 Lease & Rental Revenues 551.0 $ 574.5 $ 573.7 $ 566.6 $ 2,265.9 $ Services Revenue 481.0 488.1 512.8 513.6 1,995.5 Fuel Services Revenue 142.4 149.4 167.3 166.8 625.9 Total Revenues 1,174.4 1,212.0 1,253.9 1,247.0 4,887.3 Cost of Lease & Rental 378.5 386.6 396.6 391.2 1,553.0 Cost of Services 407.5 402.8 418.3 433.7 1,662.3 Cost of Fuel Services 136.6 145.1 160.7 162.0 604.4 Other Operating Expenses 44.5 42.9 38.4 37.6 163.5 Selling, General & Administrative Expenses 146.7 156.6 161.9 160.3 625.5 Gain on Vehicle Sales, net (3.4) (2.4) (3.3) (3.2) (12.3) Interest Expense 38.1 36.6 35.7 33.9 144.3 Miscellaneous Income, net 0.6 (1.4) (2.4) (0.5) (3.7) Restructuring and Other Charges, net 2.8 (0.2) 3.7 0.1 6.4 1,152.0 1,166.7 1,209.6 1,215.2 4,743.5 Earnings Before Income Taxes 22.4 45.3 44.2 31.8 143.8 Provision for Income Taxes 11.5 18.3 15.8 8.1 53.7 Earnings from Continuing Operations 10.9 $ 27.1 $ 28.4 $ 23.7 $ 90.1 $ |
02/02/12 Proprietary and Confidential 43 Non-GAAP Financial Measures This presentation includes “non-GAAP financial measures” as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. Specifically, the following non-GAAP financial measures are included in this presentation: Non-GAAP Financial Measure Comparable GAAP Measure Reconciliation & Additional Information Presented on Slide Titled Page Operating Revenue / Operating Revenue Forecast Total Revenue / Total Revenue Forecast Key Financial Statistics 5,6,19 Earnings Before Restructuring and Income Taxes Earnings before Income Taxes Business Segments 9-10 Comparable EPS Excluding Pension EPS Comparable EPS – Excluding Non-Service Pension Costs 25 Comparable Earnings / Comparable EPS Earnings / EPS from Continuing Operations Earnings and EPS from Continuing Operations Reconciliation 44 Comparable Earnings Before Income Tax / Comparable Tax Rate Earnings Before Income Tax / Tax Rate EBT and Tax Rate from Continuing Operations Reconciliation 45-46 Comparable EPS Forecast EPS Forecast EPS Forecast – Continuing Operations 24 Adjusted Return on Capital / Adjusted Total Capital Net Earnings / Total Capital Adjusted Return on Capital Reconciliation Segment Adjusted Return on Capital Reconciliation 47-50 Total Cash Generated / Free Cash Flow Cash Provided by Operating Activities Cash Flow Reconciliation 53-54 Total Obligations / Total Obligations to Equity Balance Sheet Debt / Debt to Equity Debt to Equity Ratio Debt to Equity Reconciliation 51-52 FMS / SCS / DCC Operating Revenue and Segment EBT as % of Operating Revenue FMS / SCS / DCC Total Revenue and Segment EBT as % of Total Revenue Fleet Management Solutions / Supply Chain Solutions / Dedicated Contract Carriage 28-33 |
Earnings and EPS from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 4Q11 - 4Q11 - 4Q10 - 4Q10 - Earnings EPS Earnings EPS Reported 47.7 $ 0.92 $ 41.4 $ 0.80 $ Int'l Asset Gain on Sale - - (0.9) (0.02) Tax Benefits - - (10.8) (0.21) Acquisition Related Transaction Costs 0.4 0.01 4.1 0.08 Restructuring Charges 2.0 0.04 - - Comparable 50.1 $ 0.97 $ 33.8 $ 0.65 $ FY11 - FY11 - FY10 - FY10 - Earnings EPS Earnings EPS Reported 171.4 $ 3.31 $ 124.6 $ 2.37 $ Int'l Asset Gain on Sale - - (0.9) (0.02) Tax Law Changes/Benefits 4.8 0.09 (10.8) (0.21) Acquisition Related Transaction Costs 1.9 0.04 4.1 0.08 Restructuring Charges 2.5 0.05 - - Comparable 180.6 $ 3.49 $ 117.0 $ 2.22 $ Proprietary and Confidential 44 44 Proprietary and Confidential 02/02/12 |
45 EBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 02/02/12 45 Proprietary and Confidential 4Q11 - 4Q11 - 4Q11 - EBT Tax Tax Rate Reported 73.1 $ 25.4 $ 34.8% Acquisition Related Transaction Costs 0.4 - Restructuring Charges 2.9 0.9 Comparable 76.4 $ 26.3 $ 34.4% FY11 - FY11 - FY11 - EBT Tax Tax Rate Reported 279.4 $ 108.0 $ 38.7% Tax Law Changes / Benefits - (4.8) Acquisition Related Transaction Costs 2.1 0.2 Restructuring Charges 3.7 1.2 Comparable 285.2 $ 104.6 $ 36.7% |
46 EBT and Tax Rate from Continuing Operations Reconciliation ($ Millions or $ Earnings Per Share) 02/02/12 46 Proprietary and Confidential 4Q10 - 4Q10 - 4Q10 - EBT Tax Tax Rate Reported 49.6 $ 8.1 $ 16.4% Gain on Sale of Building (0.9) - Tax Benefits - 10.8 Acquisition Costs 4.1 - Comparable 52.7 $ 18.9 $ 35.9% FY10 - FY10 - FY10 - EBT Tax Tax Rate Reported 186.3 $ 61.7 $ 33.1% Gain on Sale of Building (0.9) - Tax Benefits - 10.8 Acquisition Costs 4.1 - Comparable 189.4 $ 72.6 $ 38.3% |
02/02/12 Proprietary and Confidential 47 Adjusted Return on Capital Reconciliation ($ Millions) (1) Earnings calculated based on a 12-month rolling period. (2) Interest expense includes interest on off-balance sheet vehicle obligations. (3) Income taxes were calculated by excluding taxes related to comparable earnings items and interest expense. (4) The average is calculated based on the average GAAP balances. (5) Represents comparable earnings items for those periods. (6) The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (includes off-balance sheet debt) and equity should be included in evaluated how effectively capital is utilized across the business. 2004 2005 2006 2007 2008 2009 Net earnings (1) 216 $ 227 $ 249 $ 254 $ 200 $ 62 $ Cumulative effect of change in accounting principle - 2 - - - - Restructuring and other charges, net and other items (24) (2) - 1 70 30 Income taxes 115 129 144 152 150 54 Adjusted earnings before income taxes 307 357 393 407 420 146 Adjusted interest expense (2) 106 127 149 169 165 150 Adjusted income taxes (3) (156) (186) (207) (220) (230) (122) Adjusted net earnings 257 $ 298 $ 332 $ 356 $ 355 $ 174 $ Average total debt (4) 1,811 $ 2,148 $ 2,480 $ 2,848 $ 2,882 $ 2,692 $ Average off-balance sheet debt (4) 152 148 99 150 171 142 Average total shareholders' equity (4) 1,412 1,555 1,610 1,791 1,778 1,396 Average adjustments to shareholders' equity (5) (16) (5) (5) 1 10 16 Adjusted average total capital 3,359 $ 3,846 $ 4,184 $ 4,789 $ 4,841 $ 4,245 $ Adjusted return on capital (6) 7.7% 7.8% 7.9% 7.4% 7.3% 4.1% |
02/02/12 Proprietary and Confidential 48 Adjusted Return on Capital Reconciliation 2010 2011 Net Earnings (1) 118 $ 170 $ Restructuring and Other Charges, Net and Other Items 6 6 Income Taxes 61 108 Adjusted Earnings Before Income Taxes 185 284 Adjusted Interest Expense (2) 133 135 Adjusted Income Taxes (3) (124) (157) Adjusted Net Earnings 194 $ 262 $ Average Total Debt (4) 2,512 $ 3,079 $ Average Off-Balance Sheet Debt (4) 114 78 Average Total Shareholders' Equity (4) 1,402 1,428 Average Adjustments to Shareholders' Equity (5) 2 4 Adjusted Average Total Capital 4,030 $ 4,588 $ Adjusted Return on Capital (6) 4.8% 5.7% ($ Millions) (1) Earnings calculated based on a 12-month rolling period. (2) Interest expense includes interest on off-balance sheet vehicle obligations. (3) Income taxes were calculated by excluding taxes related to comparable earnings items and interest expense. (4) The average is calculated based on the average GAAP balances. (5) Represents comparable earnings items for those periods. (6) The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (includes off-balance sheet debt) and equity should be included in evaluated how effectively capital is utilized across the business. |
02/02/12 Proprietary and Confidential 49 Segment Adjusted Return on Capital Reconciliation FMS SCS DCC Net Earnings (1) 152 $ 43 $ 20 $ Restructuring and Other Charges, Net and Other Items 6 - - Income Taxes 92 26 13 Adjusted Earnings Before Income Taxes 250 69 33 Adjusted Interest Expense (2) 135 5 3 Adjusted Income Taxes (3) (136) (29) (15) Adjusted Net Earnings 249 $ 46 $ 21 $ Average Total Debt (4) 3,085 $ 43 $ (53) $ Average Off-Balance Sheet Debt (4) 76 93 127 Average Total Shareholders' Equity (4) 1,144 270 50 Average Adjustments to Shareholders' Equity (5) 5 - - Adjusted Average Total Capital 4,310 $ 406 $ 125 $ Adjusted Return on Capital (6) 5.8% 11.2% 16.6% ($ Millions) 2011 (1) Earnings calculated based on a 12-month rolling period. (2) Interest expense includes interest on off-balance sheet vehicle obligations. (3) Income taxes were calculated by excluding taxes related to comparable earnings items and interest expense. (4) The average is calculated based on the average GAAP balances. (5) Represents comparable earnings items for those periods. (6) The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (includes off-balance sheet debt) and equity should be included in evaluated how effectively capital is utilized across the business. |
02/02/12 Proprietary and Confidential 50 Segment Adjusted Return on Capital Reconciliation ($ Millions) 2010 (1) Earnings calculated based on a 12-month rolling period. (2) Interest expense includes interest on off-balance sheet vehicle obligations. (3) Income taxes were calculated by excluding taxes related to comparable earnings items and interest expense. (4) The average is calculated based on the average GAAP balances. (5) Represents comparable earnings items for those periods. (6) The Company adopted adjusted return on capital, a non GAAP financial measure, as the Company believes that both debt (includes off-balance sheet debt) and equity should be included in evaluated how effectively capital is utilized across the business. FMS SCS DCC Net Earnings (1) 118 $ 26 $ 19 $ Restructuring and Other Charges, Net and Other Items - 3 - Income Taxes 54 18 12 Adjusted Earnings Before Income Taxes 172 47 31 Adjusted Interest Expense (2) 134 5 2 Adjusted Income Taxes (3) (103) (20) (14) Adjusted Net Earnings 203 $ 32 $ 19 $ Average Total Debt (4) 2,565 $ (6) $ (41) $ Average Off-Balance Sheet Debt (4) 111 81 116 Average Total Shareholders' Equity (4) 1,283 115 30 Average Adjustments to Shareholders' Equity (5) - 1 - Adjusted Average Total Capital 3,959 $ 191 $ 75 $ Adjusted Return on Capital (6) 5.1% 16.9% 18.2% |
02/02/12 Proprietary and Confidential 51 Debt to Equity Reconciliation % to % to % to % to % to % to % to % to 12/31/00 Equity 12/31/01 Equity 12/31/02 Equity 12/31/03 Equity 12/31/04 Equity 12/31/05 Equity 12/31/06 Equity 12/31/07 Equity Balance Sheet Debt $2,017 161% $1,709 139% $1,552 140% $1,816 135% $1,783 118% $2,185 143% $2,817 164% $2,776 147% Receivables Sold 345 110 - - - - - - PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 879 625 370 153 161 117 78 178 PV of contingent rentals under securitizations 209 441 311 - - - - - Total Obligations $3,450 275% $2,885 234% $2,233 201% $1,969 146% $1,944 129% $2,302 151% $2,895 168% $2,954 157% ($ Millions) Note: In connection with adopting FIN 46 effective July 1, 2003, the Company consolidated the vehicle securitization trusts previously disclosed as off-balance sheet debt. |
02/02/12 Proprietary and Confidential 52 Debt to Equity Reconciliation ($ Millions) Note: Amounts may not recalculate due to rounding. % to % to % to % to 12/31/08 Equity 12/31/09 Equity 12/31/10 Equity 12/31/11 Equity Balance Sheet Debt $2,863 213% $2,498 175% $2,747 196% $3,382 257% Receivables Sold - - - - PV of minimum lease payments and guaranteed residual values under operating leases for vehicles 163 119 100 64 Total Obligations $3,026 225% $2,617 183% $2,847 203% $3,446 261% |
02/02/12 Proprietary and Confidential 53 ($ Millions) Cash Flow Reconciliation 12/31/00 (4) 12/31/01 (4) 12/31/02 (4) 12/31/03 (4) 12/31/04 (4) 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 Cash Provided by Operating Activities 1,023 $ 365 $ 617 $ 803 $ 867 $ 776 $ 852 $ 1,097 $ 1,248 $ 985 $ Less: Changes in Bal. of Trade Rec. Sold (270) 235 110 - - - - - - - Collections of Direct Finance Leases 67 66 66 61 64 69 65 62 61 65 Proceeds from Sale (Prim. Rev. Earn. Equip.) 230 173 152 210 331 333 332 373 262 216 Proceeds from Sale & Leaseback of Assets - - - 13 118 - - 150 - - Other Investing, Net 4 (4) 4 4 1 - 2 2 - - Total Cash Generated (1) 1,054 835 949 1,091 1,381 1,179 1,252 1,684 1,571 1,266 Capital Expenditures (2) (1,296) (704) (582) (734) (1,092) (1,387) (1,691) (1,304) (1,230) (652) Free Cash Flow (3)(5) (242) $ 131 $ 367 $ 357 $ 289 $ (208) $ (439) $ 380 $ 341 $ 614 $ Memo: Depreciation Expense 580 $ 545 $ 552 $ 625 $ 706 $ 735 $ 739 $ 811 $ 836 $ 881 $ Gains on Vehicle Sales, Net 19 $ 12 $ 14 $ 16 $ 35 $ 47 $ 51 $ 44 $ 39 $ 12 $ (1) The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes total cash generated provides investors with an important measure of total cash inflows generated from our on-going business activities which include sales of revenue earning equipment, sales of operating property and equipment, sale and leaseback of revenue earning equipment, collections on direct finance leases and other cash inflows. (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. (3) The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes free cash flow provides investors with an important perspective on the cash available for debt service and shareholders after making capital investments required to support ongoing business operations. The calculation of free cash flow may be different from the calculation used by other companies and therefore comparability may be limited. (4) Amounts have not been recasted for discontinued operations. (5) Free Cash Flow excludes acquisitions and changes in restricted cash. |
02/02/12 Proprietary and Confidential 54 ($ Millions) Cash Flow Reconciliation (1) The Company uses total cash generated, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes total cash generated provides investors with an important measure of total cash inflows generated from our on-going business activities which include sales of revenue earning equipment, sales of operating property and equipment, sale and leaseback of revenue earning equipment, collections on direct finance leases and other cash inflows. (2) Capital expenditures presented net of changes in accounts payable related to purchases of revenue earning equipment. (3) The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes free cash flow provides investors with an important perspective on the cash available for debt service and shareholders after making capital investments required to support ongoing business operations. The calculation of free cash flow may be different from the calculation used by other companies and therefore comparability may be limited. (4) Free Cash Flow excludes acquisitions and changes in restricted cash. 12/31/10 12/31/11 Cash Provided by Operating Activities from Continuing Operations 1,028 $ 1,042 $ Proceeds from Sales (Primarily Revenue Earning Equipment) 235 300 Proceeds from Sale and Leaseback of Assets - 37 Collections of Direct Finance Leases 62 62 Other, Net 3 - Total Cash Generated (1) 1,328 1,442 Capital Expenditures (2) (1,070) (1,699) Free Cash Flow (3)(4) 258 $ (257) $ Memo: Depreciation Expense 834 $ 872 $ Gains on Vehicle Sales, Net 29 $ 63 $ |